Energy / Gas Prices

Natural gas relationships are a bit like marriage. They are often long, expensive and ultimately very difficult to end. There could not be a better example than the energy relationship between Gazprom and Turkmenistan.
Although the country’s independence from the Soviet Union gave the newly-elected president, Saparmurad Niyazov, also known as Turkmenbashi (the Father of the Turkmens), exclusive control over the sixth largest natural gas reserves in the world, the government’s dependence on Russia to market Turkmen gas did not change. For most of the 1990s and early 2000s, Turkmenistan was selling the majority of its gas output, to Russia,…

The unconventional gas revolution has begun spreading to ever more countries around the world. Many regions outside North America believe that the shale gas boom can be replicated thus transforming their economic prospects. For energy-importing countries in the Middle East and North Africa (MENA), unconventional energy production would not be just a boon for the economy but a matter of survival in times of declining competitiveness and political instability. Morocco is a case in point.
The country, located on the northwest tip of Africa, is more than 90 percent dependent on foreign energy imports. Crude oil and coal purchases accounted…

Another LNG train is up and running in Australia, adding to the growing abundance of capacity.
BG Group announced that its second LNG train at its Queensland Curtis LNG (QCLNG) facility in northeastern Australia is now up and running. When the facility ramps up and reaches its highest production level – expected in mid-2016 – it will be able to ship 8 million tonnes of LNG per year (mtpa), or the equivalent of ten ships per month.
The $20 billion LNG project is not the only one expected to come online this year. Santos is planning on starting up its…

In the last month or so a kind of stealth move has been taking place in an unlikely energy commodity.
Natural gas, the poster child for overproduction last year as energy prices collapsed seems to have found a bottom. Indeed, if price action is to be believed it is even possible that we are witnessing the beginning of a significant rally in the commodity. Of most interest to investors though is that as gas begins to edge upwards, stocks in the industry are still under pressure.There is a perfectly logical explanation for that, and it is a product of a…

Russian energy giant Gazprom is building up a global portfolio with a western oil major.
Gazprom and Royal Dutch Shell are teaming up on several energy projects that will benefit both. The two energy companies have agreed to build an expansion of the Nord Stream Pipeline, a major natural gas pipeline that travels beneath the Baltic Sea. The pipeline is a priority for Russia, which will allow it to expand its natural gas exports to Europe while also cutting out Ukraine from the mix.
Gazprom, Shell, along with E.ON and OMV – two gas importers in Western Europe – have…

U.S. retail gasoline prices last week averaged over $2.80 a gallon, thirty cents higher than a month ago. The preliminary University of Michigan index of consumer sentiment for May was 88.6, down 7 points from the month before. Are these two developments related?The consumer sentiment index is plotted in black in the graph below with units on the left scale. The negative of the gasoline price in real terms (deflated using the CPI) is shown in blue, with units on the right scale. I have plotted the negative of gasoline prices to help highlight the negative relation between the two…

Last Friday we finally got confirmation of where all the natural gas supply has been coming from as Cabot (COG) reported its earnings. Just like Chesapeake (CHK), they reduced natural gas output, but on a much grander scale. CHK has yet to report and will do so on May 6th providing even more color on the subject.
Last month they announced a 2% reduction in NGAS volumes to 1-3% for 2015 vs. 3-5%. But the ramp up of supply from Marcellus, and to a lesser extent Utica, and a corresponding flat to up rig count in natural gas rigs in…

Russia will remain a major supplier of natural gas to the EU as projects to find alternative sources face headwinds from escalating costs and political meddling from Moscow. Whereas Europe is attempting to limit natural gas imports from Russia, few source countries have the reserves and infrastructure to meet demand from Brussels. Moreover, Russia relies on internal EU division to maintain the status quo.
Over the past year, many have clamored for the EU to reduce its energy reliance on an increasingly revanchist Russia. As approximately 30% of its natural gas imports stem from Russia, it seems logical that the…

Russia says it is considering a request by the European Commission (EC), relayed by Ukraine’s state-owned gas company Naftogaz, to extend its current discount for the gas it sells to Ukraine.
The EC proposal, received by Russia’s state-owned Gazprom on March 27, was to have the discount last for another full year, through the end of March 2016. But Russian energy Minister Alexander Novak said March 30 that any extension would probably be for only three months.
“The Russian government will prepare a decision in the near future,” Novak said in an interview on Russian state television. “The issue will…

The Rotating Roles of Accused and AccuserIt never fails during election season that when gasoline prices are falling, the party out of power and media members sympathetic to that party will start to make accusations and insinuations that the President is manipulating gasoline prices in order to win elections. It happened when Clinton was in office, it happened when Bush was in office, and now it’s happening while Obama is in office. The only things that change are the party that is being charged of manipulating prices, and the people who are defending or accusing that party. This year it’s…